ASML and China

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(1) China Buys Near-Record $40 Billion of Chip Gear to Beat US Curbs. Bloomberg, Jan 22, 2024.
https://www.bloomberg.com/news/a ... ar-to-beat-us-curbs
https://finance.yahoo.com/news/c ... d-40-053157693.html

(2) Henry Ren, ASML Reclaims Title of Third-Biggest European Stock From Nestle. Bloomberg, Jan 22, 2024.
https://www.bloomberg.com/news/a ... n-stock-from-nestle
https://finance.yahoo.com/news/a ... gest-101128658.html
---------------------------------$ 40 billion
Mon, January 22, 2024 at 12:31 AM EST
(Bloomberg) -- China’s imports of chipmaking machines jumped last year as firms ramped up investment in an attempt to get around US-led efforts to hobble the nation’s semiconductor industry.

Imports of the machinery used to make computer chips rose 14% in 2023 to almost $40 billion — the second largest amount by value on record in data going back to 2015, according to Bloomberg calculations based on official customs data. The increase came despite a 5.5% drop in total imports last year, underscoring the importance that the Chinese government and the nation’s chip industry have placed on becoming self-sufficient.

Chinese chip companies are rapidly investing in new semiconductor factories to try and advance the nation’s capabilities and get around export controls imposed by the US and its allies. Those curbs are making it harder for Chinese companies to get access to the machines needed to make the most powerful chips — and slowing the development of China’s high-tech sector, which is seen as a threat to the US.

China’s imports from the Netherlands soared last year ahead of new export controls, which will further limit the ability of companies such as Semiconductor Manufacturing International Corp. to get the latest machinery.

In December, imports of lithography equipment from the Netherlands jumped almost 1,000% from a year earlier to $1.1 billion as firms rushed to buy ahead of the start of Dutch restrictions this month.

Even before those curbs came into effect, Dutch company ASML Holding NV had canceled shipments of some of its top-of-the-line machines to China at the request of the US government, Bloomberg reported earlier this month. The cancellations came weeks before export bans on the high-end chipmaking equipment came into effect.
-----------------------------------reclaims  (Not reproduced is market capitalization of four largest European companies.)
Mon, January 22, 2024 at 5:11 AM EST

(Bloomberg) -- ASML Holding NV reclaimed the position of Europe’s third-biggest listed company from Nestle SA after its shares were boosted by an upgrade from Bernstein analysts optimistic about the Dutch chip-equipment firm’s outlook.

Shares of ASML rallied to a two-year high on Monday, valuing the company at about $306 billion, compared with packaged-food giant Nestle at $301 billion. Only Novo Nordisk A/S and LVMH are worth more in Europe.

ASML’s share-price gains are underpinned by hopes of a recovery in spending by chipmakers on high-end equipment, after the company forecast that 2025 will see “very significant” growth following a limited increase in revenue this year. Key customer Taiwan Semiconductor Manufacturing Co. has pledged to retain a high level of investment, reflecting strong demand for chips used in artificial intelligence applications.

Bernstein analysts Sara Russo and Chris Elias on Monday upgraded their rating on ASML to outperform, as the stock looks “increasingly attractively priced” compared to its peers, they wrote in a note. ASML gained 35% last year, lagging behind the Philadelphia Semiconductor Index’s 60% jump.

While the year ahead appears challenging, “it’s looking like a good entry point for ASML given the expected growth in 2025,” they said.

Wall Street analysts have turned more bullish on ASML recently. Citigroup Inc. opened a positive catalyst watch on Monday, tipping management to stick with their bullish outlook for 2025. Morgan Stanley, meanwhile, named the stock as a top pick among European semiconductor companies.

ASML’s rally faces a test on Wednesday when the company reports fourth-quarter results. Analysts on average expect its quarterly orders to decline by more than 40% from a year earlier, underscoring the challenges confronting near-term demand.
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